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John Carmack says Sony and Microsoft "should auction their own console stock" to cut out scalpers

gunslikewhoa

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That doesn’t make sense, which is why they don’t care. Whomever the scalper sells the product to, will still look for software and accessories, otherwise the hardware might as well be a paperweight for the consumer.

To your second point, if there was competition, MAYBE. However, at the moment, the PlayStation is the only platform where a consumer can play Sony software, same goes for Microsoft and the Xbox.

First, scalpers are sitting on thousands of units at any given time that would otherwise be in the hands of gamers already. Second, when somebody pays an extra few hundred to a thousand more for a console, that's a few hundred to a thousand more that they don't have to spend on games, etc.

Not everyone is tied to an ecosystem. Not everyone really cares enough about which console they own to wait six months for the one they prefer. There are tons of casual gamers out there.
 
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UltimaKilo

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First, scalpers are sitting on thousands of units at any given time that would otherwise be in the hands of gamers already. Second, when somebody pays an extra few hundred to a thousand more for a console, that's a few hundred to a thousand more that they don't have to spend on games, etc.

Not everyone is tied to an ecosystem. Not everyone really cares enough about which console they own to wait six months for the one they prefer. There are tons of casual gamers out there.
Casual gamers are not really going to spend money on a 3000 series card or a new $500 console, they will just play games in their phone or, at best, pick up a Switch.

Scalpers are not sitting on thousands of units, the sell them, and quickly. In fact, these consoles are already available enough that any scalper left is likely scrambling to move whatever they have.

The consumer that both willing and able to spend way above market value on a video game computer system, more often than not, have no issues picking up all the games and accessories they want the way someone in the market for a Ferrari is not going to be put off by the price of floor mats.
 
Oct 16, 2017
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I don't understand why someone would think that either Sony or Microsoft would care about the situation, it's not like scalpers buy the consoles and destroy them to make everyone angry, they just resell them at a bigger price and people buy them. So in the end of the day the consoles end up in the customer hands. The only good solution would be if you could buy these consoles like you buy new cars ( put some money upfront and they give you a date when you will receive the product and then you can pick up the product if you disclose the payment). Simple and easy and you won't get frustrated why the store page does not load or why you can't press buy or waste hours trying and in the end you see the site homepage message that the console is sold out for now.
If you don't understand why, then you don't understand why the consoles are sold at a loss.
Sony and Microsoft want as many gamers to own THEIR console, ASAP, so that the base can grow and entice third party to make big AAA games on it. If you don't have enough console owners, you would not have enough potential customers and third party games stay cross-gen.

Scalpers take these consoles and take it off the customers. The customers could only get their consoles by paying extra money to scalpers, money that was MEANT FOR BUYING GAMES. Money that Xbox and Playstation was meant to recover by having the customer buying profitable software and pay microtransactions. If 1000 dollars extra are paid to scalpers, that is 1000 dollars that the console holder is potentially losing.

Scalpers are literally the enemy of the market. A force that profits by making everyone else unhappy. The suppliers are unhappy, the players are unhappy, the only ones who are truly neutral are the shop front dealers who have no skin in the game.

I am just surprise we still have people trying to act like scalping is somehow not innate evil in economics. Transferring goods from producers to consumers as efficiently as possible is the goal of the market, to profit from interfering with it is literally an attack on it.

Yes, it is legal; plenty of shitty acts are not illegal.
 
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It's beyond a fucking joke in the UK, you haven't a hope in hell of snagging one without hitting refresh at fuck knows o'clock... Who does that? I sure a shit can't be arsed with it, i don't see why Amazon, Game, Currys, Argos etc don't simply let you place a fucking order for one and then ship it when it becomes available, limit it to one order per address per credit card and that's you done until the supply sorts itself out it's a fucking no brainer ffs, first come first served
Exactly, online betting accounts have this down to a tee to stop people multiaccohnting and abusing betting offers. Surely it can't be this hard.
 

gunslikewhoa

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Casual gamers are not really going to spend money on a 3000 series card or a new $500 console, they will just play games in their phone or, at best, pick up a Switch.

Scalpers are not sitting on thousands of units, the sell them, and quickly. In fact, these consoles are already available enough that any scalper left is likely scrambling to move whatever they have.

The consumer that both willing and able to spend way above market value on a video game computer system, more often than not, have no issues picking up all the games and accessories they want the way someone in the market for a Ferrari is not going to be put off by the price of floor mats.

That's a lot of assumptions.

There is an entire spectrum of casual gamers. Casual gamers don't buy consoles? Okay.
 
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RedVIper

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no, the scalpers will push the price of the auctions up, buying them all well above retail, only to turn around and sell them at an even higher price when they're no longer available.

supply is the only thing that is going to end the reselling market.

No, that's not how it works.

If people were willing to pay more to scalpers they would have simply outbid them.

This would eliminate scalping for sure, I don't think it's going to be very popular though since it would mean "whoever has more money gets a console"
 

FireFly

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I am just surprise we still have people trying to act like scalping is somehow not innate evil in economics. Transferring goods from producers to consumers as efficiently as possible is the goal of the market, to profit from interfering with it is literally an attack on it.
From a strictly economic perspective, scalpers are consumers too. And they also participate in creating a secondary market that allows the price of consoles to match their actual market value. In some sense that reduces, not increases, price distortions (see: arbitrage) . So I don't think that economists would regard scalpers as making the market less efficient.

It is more of a philosophical and moral question as to whether scalpers should be allowed to keep the "producer surplus" they are able to extract.
 
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Oct 16, 2017
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From a strictly economic perspective, scalpers are consumers too. And they also participate in creating a secondary market that allows the price of consoles to match their actual market value. In some sense that reduces, not increases, price distortions (see: arbitrage) . So I don't think that economists would regard scalpers as making the market less efficient.

It is more of a philosophical and moral question as to whether scalpers should be allowed to keep the "producer surplus" they are able to extract.
The actual market value of food in a famine is infinite, but that doesn't give you the right to buy up all the food to profit off desperate people. Calling scalpers, consumers is LAUGHABLE. You might as well say bank robbers are consumers too.
 
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FireFly

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The actual market value of food in a famine is infinite, but that doesn't give you the right to buy up all the food to profit off desperate people. Calling scalpers, consumers is LAUGHABLE. You might as well say bank robbers are consumers too.
Economics cares about efficiency, not distribution. When resources become scarce, it provides a mechanism for rationing them based on willingness to pay, and an incentive to invest increase output to resolve the scarcity. In the case of a famine, the high prices cause new producers to enter the market until no more profit can be extracted and prices are close to production costs. So even in that case scalpers are providing (economic) value.

But economic efficiency isn't everything, since we care about how resources are distributed in the first place and if this distribution is equitable, and allows individuals to meet their basic needs. That's why politics and political philosophy exists.

(The bank robber example is a bit different since the bank robbers are not participating in a market transaction)

So TLDR; economics shouldn't condemn scalpers, but moral and political philosophy may do.
 
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Edokataki

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If you don't understand why, then you don't understand why the consoles are sold at a loss.
Sony and Microsoft want as many gamers to own THEIR console, ASAP, so that the base can grow and entice third party to make big AAA games on it. If you don't have enough console owners, you would not have enough potential customers and third party games stay cross-gen.

Scalpers take these consoles and take it off the customers. The customers could only get their consoles by paying extra money to scalpers, money that was MEANT FOR BUYING GAMES. Money that Xbox and Playstation was meant to recover by having the customer buying profitable software and pay microtransactions. If 1000 dollars extra are paid to scalpers, that is 1000 dollars that the console holder is potentially losing.

Scalpers are literally the enemy of the market. A force that profits by making everyone else unhappy. The suppliers are unhappy, the players are unhappy, the only ones who are truly neutral are the shop front dealers who have no skin in the game.

I am just surprise we still have people trying to act like scalping is somehow not innate evil in economics. Transferring goods from producers to consumers as efficiently as possible is the goal of the market, to profit from interfering with it is literally an attack on it.

Yes, it is legal; plenty of shitty acts are not illegal.
What logic is that, you say that the people who buy consoles from scalpers they buy them just to put something on their furniture and not use them? The people who buy consoles from scalpers are just in better financial position, they buy games also and they are customer also. How come the customers are unhappy if they are willing to pay to obtain the console. I want to buy these consoles but I dont have the money to buy from someone who sells them for 1k and I don't have the desire to refresh and try to fight the site in order to purchase a console. I can wait and buy them later when they are available. You logic is that if Microsoft makes 100 consoles and sell 80 to customer and 20 to scalpers they are not happy because... And sadly there is no because. These 20 will end up to customer hand that are willing to pay the price scalpers set. And they will buy games also and not put a vase of flowers on top of that because they don't have any more money left to buy games.
 

supernova8

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no, the scalpers will push the price of the auctions up, buying them all well above retail, only to turn around and sell them at an even higher price when they're no longer available.

supply is the only thing that is going to end the reselling market.

In theory you would have scalpers competing with each other and driving up the prices way beyond what consumers would be willing to pay. For instance, PS5 is $500 RRP and you see people giving in and paying $1200 ish to scalpers, but in the auction scenario, you'd have scalpers who end up paying well above retail (remember, they want to pay "retail" so they can jack up the prices) and therefore a large chunk of scalpers just wouldn't bother at all.

To be more specific:

Scalpers right now are buying the console (via bots) at $500 (or slightly more depending on whatever bundle they're forced to buy) and then selling them for around $1000 because $1000 seems to be the max-ish that "regular" consumers are willing to pay.

If we had an auction system, a few things would/should happen:

(1) Scalpers now have to pay more (on average) for their "cost of goods sold" (if you think of them running a business, as many of them clearly are).
(2) Scalpers have to sell (or rather, find consumers willing to buy) their "goods" at (potentially) significantly more than $1000 to secure a similar profit margin.
(3) Since there are fewer potential customers willing to buy your scalper goods the higher you price, fewer scalpers participate in scalping.
(4) Fewer scalpers participate in scalping.
(5) The very notion of an auction system itself means that it would end up being people using bots who are waging bidding wars against each other (assuming auctions can be botted too).
(6) By the time the consumers willing to pay "surge pricing" for PS5s have their fix, you'll be left with regular customers who just want it for the good old $500. These people are the ones who are very unlikely to pay more than retail at all and so the scalpers have even less incentive to bother.

In theory, I like it since if this is the new normal and we're going to have to pay over the odds at the beginning of every product release, I'd rather that money went straight to the companies that made those products rather than to some leeches who are really adding no value (no they're aren't "middle men" because people in those positions who are adding value usually provide some sort of service (aggregating information from both sides on a transaction, providing some sort of mediation service etc etc), scalpers are providing nothing except the opportunity to line their pockets).
 
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Derktron

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I never thought I see this happen in the gaming industry as what happened with the mobile phone industry. I can see this going both ways, one side is they all succeed and everything goes back to normal or the other side would be that they crash and burn and the gaming industry turns into the mobile industry.
 

YeulEmeralda

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Most modern governments have given their citizens electronic id cards.

Let manufacturers use government portals to tie a purchase to a single individual.

Americans don't even show ID when they go to vote lol. But it wouldn't solve anything peope would still just throw their consoles on eBay. Everyone wants that hustle.
This can only be solved on the supply side.
 

Faithless83

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In my country you have a small discount if you preorder something 5~10% off.
You still pay 90~95% of it upfront. No scalpers here.
Consoles costing 843,96USD on stores (standard price) helps too. :messenger_anxious:
That said, it's still sold out.
 

Enjay

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Sony is not interested in solving this scalping issue because they themselves are most likely upselling their own consoles on ebay. The only way anyone is gonna take any sort of initiative on this is if a studio loses a lot of money developing for ps5, and so far their only response to that is to keep delaying every game that doesn't have a ps4 port.
 

FStubbs

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Americans don't even show ID when they go to vote lol. But it wouldn't solve anything peope would still just throw their consoles on eBay. Everyone wants that hustle.
This can only be solved on the supply side.
I'm pretty sure I've had to show my ID and verify my address every time I've voted.
 

nerdface

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I like carmack, but this is a stupid solution from someone with disposable amounts of cash. As a poor gamer, I don’t feel any better if the scalper’s profits go to Sony instead.

the solution is simple...allow console sales from PSN, eShop, or xstore(?) for existing customers with $x dollars in sales.

you could check play history for non-digital purchases, your algorithm could look at online play time, friend activity, and easily carve out a customer profile for each gamer

during shortage, every gamer profile gets one console sale ...new customers aren’t going to be paying premium at auction anyway

but carmack is assuming console manufacturers WANT to solve the problem...like a restaurant with a line out the door, it just makes them look like the new hot shit
 
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I still don't think this is a bad idea. Of course it's not ideal, but it is what it is. The extra pennies MS and Sony make from this can go straight into future game development. Money is better spend there than on your average scalpers next designer shoes.
 

jroc74

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I like carmack, but this is a stupid solution from someone with disposable amounts of cash. As a poor gamer, I don’t feel any better if the scalper’s profits go to Sony instead.

the solution is simple...allow console sales from PSN, eShop, or xstore(?) for existing customers with $x dollars in sales.

you could check play history for non-digital purchases, your algorithm could look at online play time, friend activity, and easily carve out a customer profile for each gamer

during shortage, every gamer profile gets one console sale ...new customers aren’t going to be paying premium at auction anyway

but carmack is assuming console manufacturers WANT to solve the problem...like a restaurant with a line out the door, it just makes them look like the new hot shit
Its crazy because Sony's queue system is almost the best solution. I just dont get how either company cant have more available stock from their own website. Even if its months away from a delivery date.

And honestly....as of right now its probably easier to get a PS5 at a reasonable price, (no scalper BS, maybe a decent bundle) vs a Dual Sense charger.
 
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Selling the consoles direct from manufacturer can also benefit from having more customization options, Phil.
 
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Alright

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This 'scalper' issue is pushing towards something dark, i don't know what it is, but we gamers will only end up losing.

What % of units are realistically going to scalpers? 1%? 5%? 25%?

There's an easy way to kill the scalping market; don't buy from scalpers. Of course, that's like saying Horse armour is bad, don't buy yearly re-hashes and don't buy MTX. It's a nice thought, but it will never happen

Instead of will-power, lets push some invasive measures on ALL OF THE COMMUNITY because fat, spoiled timmy has FOMO.
 
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While the scalpers are a problem, the bigger problem is the actual stock drops. Here in the UK, we barely get any drops. Of course it's going to sell out when you drop a measly amount to 1 or 2 retailers every now and than. We need stock flooding in at every retailer and more people will be able to get one.
 
There's an easy way to kill the scalping market; don't buy from scalpers
Good luck ever encouraging that, we have tons of users even here on GAF that are openly lauding their purchase from scalpers, the GPU thread is a prime example.

I felt bad about buying a used/RMA 2080TI but thank fuck I did because any GPUs now are impossible come by. I don't see this getting fixed in most of 2021 TBH.
 
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dave_d

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This 'scalper' issue is pushing towards something dark, i don't know what it is, but we gamers will only end up losing.

What % of units are realistically going to scalpers? 1%? 5%? 25%?

There's an easy way to kill the scalping market; don't buy from scalpers. Of course, that's like saying Horse armour is bad, don't buy yearly re-hashes and don't buy MTX. It's a nice thought, but it will never happen

Instead of will-power, lets push some invasive measures on ALL OF THE COMMUNITY because fat, spoiled timmy has FOMO.
I saw one article claiming 10% but my guess is it's probably lower than that. Carmack's idea makes sense from an economics point of view.(Pretty much it's econ 101) That being said I wonder if a better idea would be to do auctions but have every dollar over MSRP go to PS Store credit. (IE if Sony sells a PS5 on their site in an auction for $1000 the buyer gets the PS5 with $500 of store credit.) Admittedly donating the extra money to charity would be kind of cool.
 

justiceiro

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This would result in scalpers getting consoles at a even higher prices, and selling them even higher. The only ones benefiting from this would be consoles manufacturers themselves, that would get even more money at launch.

That phil idea however is pretty good. If I knew how long would take for me to get a console, i would be way less anxious about it.

In the end, the stupidity of the ones that cave to scalpers probably prices is the real problem. Value your money more, people.
 

Alright

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I saw one article claiming 10% but my guess is it's probably lower than that. Carmack's idea makes sense from an economics point of view.(Pretty much it's econ 101) That being said I wonder if a better idea would be to do auctions but have every dollar over MSRP go to PS Store credit. (IE if Sony sells a PS5 on their site in an auction for $1000 the buyer gets the PS5 with $500 of store credit.) Admittedly donating the extra money to charity would be kind of cool.
Best idea is to do nothing. This is mountains out of mole hills
 

The Alien

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There def has to be a better way.

After all, both these companies have our email addresses (if you have an account, gamertag, etc.).

They can't contact potential buyers for first chance?
Wouldn't Sony or MS want their consoles in the hands of people that will/have bought stuff from their ecosystem?
I'm sure they know who are top purchasers/long time customers.
 
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DGrayson

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Nah, I'm not getting a console at higher price than it was announced. Fuck it, I'll wait.

I would have impulse bought a PS5 about 4x so far. But if I have to work for it or pay extra no way.
 

Warnen

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How about just persell it on there own fucking sites like Apple and just make a que.
 
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DGrayson

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Whatever they are doing...










 

Neff

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I sure a shit can't be arsed with it, i don't see why Amazon, Game, Currys, Argos etc don't simply let you place a fucking order for one and then ship it when it becomes available

If they did this they'd still be honouring preorders from October last year. It wouldn't improve the situation.

It's beyond a fucking joke in the UK, you haven't a hope in hell of snagging one without hitting refresh at fuck knows o'clock... Who does that?

The people who really, really, really want one.
 
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Warnen

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I wish they would do that, but that does nothing to stop scalpers.
It would help, many people turn to the scaplera because they have no other choice. If you can buy it and just wait for it to ship in a month or 3 that would be enough to dry up a lot of interest.

Only people that need instant gratification would turn to scalpers.
 

JerryinSoCal

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I know there is a pandemic but I wish they would ask retailers to start shipping consoles to stores so people can go buy them in person and limit one per customer, hell limit one per household and check ID's or something.
 

NickFire

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No auction needed. Just make store fronts that can only be accessed via legacy consoles for now.
 

TheMay30thMan

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So instead of paying a scalper $1000, we would be paying Microsoft $1000? Does the idiocy of this idea really need to be explained? Just cap the sales to 1 console per card and address. It’s not that hard, really.